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Daniel Major: Uranium – The Start of a Big Move

Daniel discusses the current uranium market, and he sees a lot more enthusiasm in private placements. Many companies and groups of long-term investors are increasingly interested in the sector.

It’s always been a case of when will this market get going. The demand side shows that generation capacity is back at 2011 levels. There are a lot of reactors being built, and Japanese reactors restarts are accelerating. The Japanese government has allowed 25% of power generation to be nuclear. The negative stories have been going away, and even the Trump administration has been supportive of nuclear power.

Three to four percent annual growth in nuclear energy going forwards seems probable. Daniel says, “The supply side is tightening, and contracts need renewing. Enrichment capacity has been reduced, and underfeeding is in decline. There are significant supply cutbacks coming, and many large projects are approaching their end of life.”

He feels we will see a rise in the price of uranium later this year as the production cutbacks show up in the market. Many companies require a price higher than $45 to continue to be sustainable otherwise they will shut down projects.

Utilities have been reducing their uranium inventory, and much of it is not available to the market. Utilities are starting to worry about where they will get supply. We are looking at a supply deficit next year.

GoviEx has been improving their balance sheet and preparing for feasibility studies. They need a year to get the studies completed, and financing arranged. After that, they can quickly move into construction when the market turns. Unlike many companies, they already have fully permitted projects.

Talking Points From This Week’s Episode
• Reactors in Japan are restarting, and more are under construction around the world.
• There is not a lot of depth in the uranium market.
• The supply side is becoming increasingly constrained.
• A lot of inventory held by governments and utilities is not available to the market.

Daniel Major is Chief Executive Officer of GoviEx and is a mining engineer from the Camborne School of Mines in the UK. His career spans over 25 years in the mining industry where he has established a solid track record initially with Rio Tinto at the Rossing Uranium Mine in Namibia and later as a mining analyst with HSBC Plc followed by JP Morgan Chase & Co. in London. More recently Mr. Major was Chief Executive and later Non-Executive Chairman of Basic Element Mining and Resource Division in Russia, and held leadership positions in several Canadian listed mining companies with exploration and producing assets in Canada, Russia, and South America.

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